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Charter of Rights - Constitutional law - Search and seizure - Taxation - Investigations - Whether s. 231.2(1), s. 231.7 and definition of “solicitor-client privilege” in s. 232(1) of Income Tax Act, R.S.C. 1985, c. 1 (5th Supp.) (“ITA”), infringe right guaranteed by s. 7 of Canadian Charter of Rights and Freedoms insofar as they apply to advocate or notary - Whether s. 231.2(1), s. 231.7 and definition of “solicitor-client privilege” in s. 232(1) of ITA infringe right guaranteed by s. 8 of Canadian Charter insofar as they apply to advocate or notary - If so, whether infringements are reasonable limits prescribed by law as can be demonstrably justified in free and democratic society within meaning of s. 1 of Canadian Charter.

Section 231.2(1) of the ITA authorizes the Minister of National Revenue to require, by means of a simple letter, that any person provide information or documents that might be of assistance in the administration or enforcement of the ITA. It applies, inter alia, to advocates and notaries. Section 241 of the ITA requires that any information so obtained be kept confidential.

Should anyone refuse to comply with such a “requirement to provide documents or information”, the Minister can apply to the Federal Court under s. 231.7 for an order that the person in question do so. In such a case, the court may grant the application if the information or document being sought is not protected from disclosure by “solicitor-client privilege”, which is defined in s. 232(1) of the ITA as “the right, if any, that a person has in a superior court in the province where the matter arises to refuse to disclose an oral or documentary communication on the ground that the communication is one passing between the person and the person’s lawyer in professional confidence”. However, the definition of the privilege excludes “an accounting record of a lawyer, including any supporting voucher or cheque”. The privilege applies to notaries (s. 232(1), definition of “lawyer”).

Under s. 238(1) of the ITA, any person who does not file the required documents in the manner and within the reasonable time specified in the Minister’s notice is guilty of an offence and is liable on summary conviction to a fine of not less than $1,000 and not more than $25,000, or to both a fine and imprisonment for a term not exceeding 12 months. A notary or advocate who is prosecuted will be acquitted if the notary or advocate (1) had reasonable grounds to believe that the required information or document was protected from disclosure by solicitor-client privilege; and (2) expressly communicated the refusal and the reason behind it to the Minister (s. 232(2) ITA).

The Chambre des notaires brought an action under art. 453 of the Code of Civil Procedure for a declaration that ss. 231.2(1) and 231.7, together with the exception set out in the definition of “solicitor-client privilege” in s. 232(1), are unconstitutional in relation to advocates and notaries of the province of Quebec on the basis that they are contrary to the Canadian Charter.

The Barreau joined in the action by intervening in support of the Chambre. (A similar action was brought against the Quebec tax authorities and statute, but the parties entered into a transaction.)